Chartered Online Celebrates 1,00,000 Plus Subscribers

23 December, 2015

How is the EPFO now Becoming Digital - An Insight

Customer Friendly EPFO : Digital Initiatives - Employees’
Provident Fund Organisation (EPFO), a Statutory
Body, Ministry of Labour and Employment ranks among the world’s largest
social security organizations in terms of membership and fund size. The
number of accounts is around 15 crore and almost 5 crore subscribers are
regularly contributing to the fund. The organization also has been settling
more than 1.00 crore claims annually for the past few years. The work
involved in all the spheres of EPFO’s functioning including enforcement of the
Act across the country, maintenance of individual accounts, settlement of
claims, investment of funds, ensuring prompt pension payment and updating
records is very complex and sensitive to say the least. The recent past,
especially in the last 1-2 years has seen many new initiatives being taken to
transform the functioning of the organization to enable better service to
all its stakeholders in tune with the government’s motto of minimum government
and maximum governance.

EPFO
is on way to transform the benefit delivery mechanisms by adopting IT enabled
tools and techniques. EPFO will become truly paperless and extremely
subscriber/citizen friendly in the days to come. Recently EPFO got SKOCH Award
for Smart Governance for its initiatives on UAN Programme and Transformation of
Social Security Agenda in India, the 5th Award in the last two years. Some of EPFO’s
major initiatives receiving appreciation are: Distribution of pension to the
pensioners on the first day of the month, Online Registration of establishments,
online submission of returns and remittances by the employers through
Net-Banking and Online facility for filing of statutory returns by PF exempted
establishments. Besideslaunching
Mobile Application,
SMS based UAN Activation and Missed Call services for EPF members, the EPFO has also done away with the mandatory requirement of
affixing one rupee revenue stamp on claim forms simplifying procedure and
bringing relief to millions of PF subscribers every year.

This move could be
possible as no revenue stamp is required to be fixed in respect of payment made
through NEFT (National
Electronic Funds Transfer).

1. Universal Account Number (UAN): The
UAN progamme was launched in October, 2014 as part of Pandit Deen Dayal
Upadhyay Shramev Jayate Karyakaram. It is perhaps the most radical step taken by
EPFO in the recent past. UAN allotted by EPFO to each of its subscribers is
designed to act as an umbrella for multiple member IDs allotted to the same individual
on account of different employments. UAN serves twin purpose of enabling EPFO
to identify the member without intermediation of the employer and also ensuring
speedy, transparent and efficient service delivery to the member directly. The
UAN database is seeded with various KYC details for foolproof identification of
the member and to enable e-driven services. Activating UAN, enables the member
to access a host of services like downloadable dynamic UAN card, updated
details of PF accounts, auto trigger of transfer request while changing
employment etc.

Initially,
EPFO issued UAN to 4.17 crore contributing members. Thereafter, the
organization allots UAN on continuous basis to all new entrants while old
members are allotted on making a request. EPFO keeps insisting employers covered
under the EPF and MP Act, 1952 to seed the necessary KYC details and enable the
individual EPF members to activate their UAN. By September 2015, 5.5 crore
UAN have been alloted. Almost 2.00 crore EPF members have activated
their UAN and are able to access the enhanced services available to them.

2. Benefits delivery through
e-payment mode: EPFO has opted for
National Electronic fund transfer (NEFT) for payment of PF amount to EPF
members. In the current financial year, 2015-16, more than 98%
of the cases are being sent through electronic mode resulting in faster and
safer credit to the members’ bank account. Also CCPAP (Corporate Client Cheques
payable at par) facility was launched to minimize chances of fraud and to
enable electronic payment.

EPFO
is using Core Banking Solution (CBS) facility of banks for crediting pension
every month to over 50 lakh EPF pensioners. This ensures twin benefits that
EPS pensioners get pension on the first working day of the month and EPFO
saves substantial amount to the tune of about Rs. 20.00 crore per annum
in the process.

3. Implementation of minimum
pension: The quantum of pension received
by EPS pensioners sometimes even 10 or 20 rupees per month was made Rs.1000 as
the least minimum pension guaranteed to the EPS pensioners from September,
2014. For implementing this landmark decision, the Central Government
readily agreed to bear the financial burden estimated to be around 750
crores per year. Moreover, provision of minimum pension @1000 p.m has
been approved for perpetuity by the Central Government in April 2015.

4. Online Transfer Claim Portal
(OTCP):
Transfer of PF from one account to another with change of job was considered to
be a time consuming sticky point. To address this, an online facility (OTCP)
was launched enabling a member to submit his application online for transfer on
change of employment. The request digitally authenticated by employer concerned
could be then submitted to EPFO for affecting the transfer. This has resulted
in virtually zero paper movement between EPFO offices increasing manifold, the
speed in effecting the transfer and easy monitoring of pendency. More than 7
lakh transfer claims have been handled through this facility till date. In December
2014, facility for transfer from exempted establishment to unexempted
establishment and vice versa was also introduced.

5. Revised
timeline for settlement of claims: Earlier, the mandatory timeline for
settlement of PF claims was 30 days. With the improvement in service delivery
standards, the timeline has been brought down to 20 days. The new timelines
have come into effect with effect from the month of July 2015. EPFO is
settling more than 96% of the claims within the stipulated 20 days. More than
40% of these are settled within 03 days and almost 80% within 10 days. This
achievement is remarkable in view that around 11 lakh claims are settled every
month.

6.Participation
in Equity Market: Investment of funds by EPFO is a prime function to
enable it to pay an attractive rate of interest to the subscribers. Regular
periodic evaluation and monitoring performance of portfolio managers enabled EPFO
to give an improved rate of interest to the stakeholders @8.75% p.a. Taking
advantage of the greater flexibility and increased avenues afforded by the revised
pattern of investment, EPFO took its first steps into the equity market in
August 2015. It was decided to test the waters by opting for the relatively
safe route of investments through ETF (exchange traded funds) (Initially, 5% of
the incremental corpus).

7.Online
Registration of Establishments: For greater ease in registering the
coverable establishments with EPFO, an online facility has been introduced
in June 2014. This has eliminated need for inspection of establishments
prior to its coverage by inspectors and has made acquiring a PF code number
simple, transparent and hassle free. By November 2015, more than 78,000
establishments have benefited by taking their PF code number online. This
facility has been integratedwith e-Biz portal of the Government of
India in February 2015 thereby contributing to greater ease in doing
business.

8. Multi banking facility and
reduction of administrative charges:
The compliance cost to employer has been further reduced as a facility has been
given to remit the PF dues through 56 banks instead of only State Bank
of India. Also, the rate of administrative charges has been brought down
from 1.10% to 0.85% w.e.f January 2015 which is a major relief to the
employers covered under the Act.

9.Certificate
of Coverage: For the benefit of International Workers, an online
fillable form was launched to generate Certificate of Coverage (CoC). This
centralized software is used for generating Certificate of Coverage to EPF
members working in countries having Social Security Agreements with India.
Using this, almost 70,000 members have been issued Certificate of Coverage.
Social Security Agreements have been finalized with 19 countries and such
agreements are operational in 14 countries including Finland, Sweden, Norway
and the Czech Republic.

10. Actuarial
Valuation: For assessing the health of any fund the actuarial valuation
is needed at regular intervals. For the first time since the inception of
Employees’ Deposit Linked Insurance Scheme, 1976 the actuarial valuation of
EDLI scheme was done in January 2015.As a result, EPFO has proposed a
substantial raising of the insured amount from Rs. 1.30 lakh to Rs. 6.00
lakh. The actuarial evaluation of Employees’ Pension Scheme, 1995 was
also done and by providing of better data quality to the actuary, the
estimated shortfall was brought down from the earlier Rs. 60,000 crore to only
Rs. 7,000 crore.

11. Accounts updating:
For updating of accounts on top priority, a new mechanism was devised adopting
new software to credit the interest in member’s account in an automatic manner at
the end of the financial year. In a historic first, on 1.4.2015, the first
day of the financial year, more than 15 crore accounts of the EPF members were
updated with the interest for the year 2014-15. To ensure a more robust
accounting system, proposal to introduce double entry accounting system is
under consideration.

12.MIS
and Data cleaning: In a major initiative, a massive data cleaning
exercise was launched which would result in near error free and duplication
free data base. Management Information System (MIS) was also reworked and an
online system has been introduced. Physical information collection has been
scrapped from the financial year 2015-16

13.Inoperative
Accounts Online Helpdesk: EPF accounts with no contributions received
for 36 months were termed inoperative and no further interest was credited to
such accounts. Noticing large number of inoperative accounts, an online
helpdesk was setup in February 2015 at EPFO’s website to help EPF members
track their old Inoperative PF accounts, settle them or get them transferred to
present account. Facility is provided to the members to give only the details
of his / her previous employment to the extent known along with personal
details. Only bare essential fields are mandatory like name, date of birth and
mobile number. The mobile number is verified through PIN and a reference ID is
created on the Online Helpdesk for future reference.

14. Short
code SMS service: A short code SMS
service was launched in March 2015 for EPF members. Using this service,
the member with activated UAN can send an SMS from his registered mobile number
to 7738299899 to access details of KYC status, last contribution, total PF
balance etc. The format of the SMS is EPFOHO<UAN>LAN. LAN denotes the
first three character of the preferred language in which the member desires to
get the details. This facility is available in 10 different major Indian
languages including English and Hindi. This facility has been used for more
than 2 lakh times by November 2015.

15. Mobile
governance: EPFO has initiated a number of steps to move from e-governance
to m-governance.To facilitate access to services through hand held devices;
a mobile application was unveiled in September 2015. The new mobile app
can be downloaded from the EPF website www.epfindia.gov.in.
Activation of UAN can be done through mobile phones and all PF related details
and facilities can be accessed through this application. EPS pensioners too can
access pension disbursement details through this app. The employer can view
remittance details of his establishment. More than 1.31 lakh downloads of the application
have taken place since it’s launch.

16.SMS
based UAN activation: Using the mobile app, Members can activate their
accounts by sending an SMS to 7738299899.Activated, member gets all the
enhanced services envisaged in the UAN progamme such as e-passbook, PF credit
alerts etc.

17.Missed call service:
A missed call service was launched in September 2015 to provide the UAN
activated members with all PF related details by means of giving a missed call
at number 011-22901406. On a missed call, EPFO reverts to the member with
details of his PF accounts. This feature has been used 56 lakh times since
introduction.

18. Electronic Returns for exempted
establishments: Adoption of IT based
tools to monitor exempted PF trusts has made submission process of monthly
returns by such establishments less tedious and minimized common errors of
manual submission of returns. More than 1,500 exempted establishments have used
this facility. This software has made compliance monitoring easy by EPFO. Third
party monitoring by appointing independent CAs was also initiated for the first
time. For the first time, the rates of surcharge for past irregularities in
running of the establishments were finalized and due amounts recovered.

19.Greater
facilities for EPF members: Since member account is credited every
month and data is received and reconciled electronically, UAN based
e-passbook launched in October 2014 can be accessed by a member any time.
Earlier a member could access his account details only once in a year on
receipt of annual statement of accounts.

20.Establishment search facility: Using this facility, members can
verify the PF code numbers of their establishments and their names figuring in
remittances made by the employers for any particular month. This is equally
helpful to employer who can keep a tab on the contractor who enrolls and
engages workers and can verified workers’ names.

21.Information
and alerts through SMS: From October 2014, EPFO is sending SMS
to the UAN activated members on their registered mobile numbers regarding their
monthly PF contribution. Likewise, an SMS alert is sent to employers in case
of non submission of returns or non deposit of PF dues.

22. Reduction
in SBI’s collection rate: After negotiations SBI decided to reduce
their collection rates. This would result in savings of an estimated Rs. 100
crore for the organization. Also, with employer’s gradual compulsorily
remitting the PF contributions through internet banking, collection cost to
EPFO have further fallen.

23. Grievance Redressal:
Grievance redressal of the EPF members and the employers was accorded top most
priority. As a result, about 80% of grievances are pending within 7 days and
97% of grievances are pending within 15 days only. By systematic monitoring at
the head office level, the pendency has drastically come down from 20,000
grievances to only 2000-3000 grievances on any given day which is a minuscule
figure when seen against the 15 crore accounts being handled by EPFO.

In brief, EPFO
is ready with customer friendly facilities to serve the tech savvy young
generation of workers. Database updated up to
the mark and growing use of e-services will streamline hiccups of transforming the benefit delivery
mechanisms in times to come.